The identity of the recipient's financial institution;and, if received: websites (e.g. Treasury has determined that mutual funds should be considered financial institutions for certain purposes and thus certain BSA rules are applicable to mutual funds. What are the "Travel" rule's requirements? If transactions originate from, or are routed to, any FATF-identified countries, it might be an indication of suspicious activity. 1010.350(c)(3)) in a foreign country and the aggregate value of these accounts exceeds $10,000. Sharing Suspicious Activity Reports by Securities Broker-Dealers, Mutual Funds, Futures Commission Merchants, and Introducing Brokers in Commodities with Certain U.S. Affiliates (Nov. 23, 2010). Finance institutions can prepare immediately in FinCEN's proposal to amend the recordkeeping and travel rule laws under the Bank Secrecy Act. The address of the recipient, (Dec. 4, 2020) NASCUS supports making some changes to recordkeeping and travel rule regulations under rules implementing the Bank Secrecy Act (BSA) to promote calibrating the value of anti-money laundering measures with operational, compliance and expense considerations of credit unions and other institutions, NASCUS wrote in a comment letter filed Nov. 27. Financial institutions will need to decide if: Will your Financial Institution be ready for the changes proposed in the Travel Rule? Share sensitive information only on official, secure websites. The safe harbor provision, added to the BSA by Section 314(b) of the USA PATRIOT Act, protects financial institutions, including investment companies, from certain liabilities in connection with sharing certain AML related information with other financial institutions for the purposes of identifying and reporting activities that may involve terrorist acts or money laundering activities. Mutual funds have other reporting obligations imposed by the BSA. Information on salary and leave arrangements if your employees need to travel. Does this rule treat banks and non-bank financial institutions differently? See Interagency Interpretive Guidance on Customer Identification Program Requirements under Section 326 of the USA PATRIOT Act (Apr. The regulations define a private banking account as an account that: (a) requires a minimum deposit of assets of at least $1,000,000; (b) is established or maintained on behalf of one or more non-U.S. persons who are direct or beneficial owners of the account; and (c) has an employee assigned to the account who is a liaison between the financial institution and the non-U.S. person. You should ensure that your employees vaccinations are up to date. 12 CFR Part 219 (Regulation S), which cross-references the substantive requirements in the Recordkeeping Rule. Lower the threshold under the Recordkeeping Rule, and lower the threshold under the Travel Rule, to $250 for funds transfers and transmittals of funds that begin or end outside the United States. A correspondent account includes any account established for a foreign financial institution (including a foreign bank) to receive deposits from, or to make payments or other disbursements on behalf of, the foreign financial institution, or to handle other financial transactions related to the foreign financial institution. The Anti-Money Laundering Act of 2020 (AMLA) tasked the Secretary of the Treasury, in consultation with specified regulators and law enforcement, with undertaking a review of BSA regulations and guidance and directed the Secretary to make appropriate changes to improve the efficiency of the regulations and guidance. See 60 FR 231-01 (Jan. 3, 1995). Employees who are physically well should be allowed to work remotely if they are able to do so. This rule uses terms that are intended to parallel those used in UCC Article 4A, but that are applicable to all financial institutions, as defined within the Bank Secrecy Act's implementing regulations. No. What kinds of records should I keep? Funds Travel Regulations:Questions & Answers, Alerts/Advisories/Notices/Bulletins/Fact Sheets, Suspicious Activity Report (SAR) Advisory Key Terms, Public Posting Notice of Finding of Discrimination, Security and Vulnerability Disclosure Policies (VDP). For employees who are unable to work remotely, you may refer to the table below. No. Voluntary Information Sharing Among Financial Institutions: Section 314(b):A separate safe harbor provision encourages and facilitates voluntary information sharing among participating financial institutions. One provision requires broker-dealers to respond to mandatory requests for information made by FinCEN on behalf of federal law enforcement agencies. When a transmittal of funds is initiated by more than one transmittor, or sent to more than one recipient, the transmittor's financial institution may select one transmittor, or one recipient, as the person whose information must be passed under the Travel rule. Every employer covered by the Fair Labor Standards Act (FLSA) must keep certain records for each covered, nonexempt worker. Please see 31 CFR 103.11 for more information. This check contains accompanying instructions to have Financial Institution B subsequently credit Customer 2's account. [8], http://www.fincen.gov/financial_institutions/secs_futures/, Division of Investment Management, Office of Regulatory Policy, Division of Examinations, Office of Chief Counsel, Examination Hotline for SEC-Registered Entities. The higher volume of covered transactions would place a greater compliance burden and responsibility on first-line employees facilitating occasional transactions, requiring additional training and quality assurance. Financial Institutions will face higher compliance costs via the higher burden of reporting, recordkeeping, information technology implementation and maintenance costs. when the employees that are responsible with capturing and retaining the information required under the Rules will receive the training on the proposed rules. The Singapore Ministry of Health (MOH) has issuedan advisorythat you should follow if you are feeling unwell, displaying COVID-19 symptoms or test positive while visiting Singapore. On the basis of examination procedures completed, including transaction testing, form a conclusion about the ability of policies, procedures, and processes to meet regulatory requirements associated with funds transfers. FinCEN Advisory is a product of the Financial Crimes Enforcement Network, Department of the Treasury, Post Office Box 39, Vienna, Virginia 22183. However, the transmittors' money transmitter itself is independently obligated to make travel the required information to the recipients' money transmitter. In addition, if both the transmittor and the recipient, that is, as defined, the beneficial recipient, are any of the following, then the transmittal of funds is not subject to these rules: 6LinkedIn 8 Email Updates, Due Diligence Programs for Correspondent Accounts, Due Diligence Programs for Private Banking Accounts, Suspicious Activity Monitoring and Reporting, Other Reporting and Recordkeeping Requirements, Information Sharing With Law Enforcement and Financial Institutions, Special Measures Imposed by the Financial Crimes Enforcement Network, Office of Foreign Asset Control (OFAC) Sanctions Programs and Other Lists, Report to Congress under the USA Patriot Act containing recommendations for applying anti-money laundering controls to investment companies, Staff Q&A Regarding the Mutual Fund Customer Identification Program Rule, Guidance on Obtaining and Retaining Beneficial Ownership Information, FAQs Regarding Customer Due Diligence Requirements for Financial Institutions, Staff Bulletin: Risks Associated with Omnibus Accounts Transacting in Low-Priced Securities, Fact Sheet: Section 312 of the USA PATRIOT Act, FIN-2006-G008: Application of the Regulations Requiring Special Due Diligence Programs for Certain Foreign Accounts to NSCC Fund/SERV Accounts, FIN-2006-G009: Application of the Regulations Requiring Special Due Diligence Programs for Certain Foreign Accounts to the Securities and Futures Industries, Interpretative Release No. For additional information concerning funds transfers, please refer toFinCEN Advisory Issue 3 entitled Funds Transfers: Questions & Answers.This advisory, as well as other information relating to FinCEN programs andTreasurys counter-money laundering efforts, may be viewed by visiting FinCENs website at: https://www.fincen.gov or by accessing the BSA Bulletin Board via computer modem at(313) 234-1453. If enacted, the proposed rule change would require all FIs engaged in any aspect of cross-border money transfers to consider whether their systems, procedures, and staff training are sufficient to implement the lowered thresholdincluding identification and verification requirements for occasional customers and the identification of cross-border transactions. A mutual funds AML compliance program must be in writing, must be approved by the mutual funds board of directors, and must include at a minimum: Because mutual funds do not have direct employees, they may delegate certain aspects of their AML programs to their service providers; however, mutual funds remain responsible for assuring compliance with the rule and overseeing the performance of any delegated responsibilities. However, if the system used to effect the transmittal of funds is not currently designed to enable these requirements to be met, the name, address, account of the transmittor and the identity of the transmittor's financial institution need not be passed on until such time as the bank that sends the order (to the Federal Reserve Bank or otherwise) completes its conversion to the expanded Fedwire message format. An FI that is only involved in the domestic portion of the transaction but that is aware that any of the parties mentioned above are outside of the United States will also be required to comply. With resumption of overseas travel, can I impose additional measures on my employees who are travelling overseas for personal reasons? 66708 (Nov. 28, 2003). Find out the entry rules for each country. The records must be maintained at the worksite for at least five years. The name of the recipient, Sign in. 4. However, the requirements of the Bank Secrecy Act apply only to activities of financial institutions within the United States. Subpart E. Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity for Casinos and Card Clubs. The lower threshold will also lower the value of structured transfers intended to evade recordkeeping requirements, making it harder for FIs to distinguish structuring from ordinary remittances. TheSEC SAR Alert Message Linenumber [202-551-SARS (7277)] should only be used in cases where a mutual fund has filed a SAR that may require immediate attention by the SEC and wants to alert the SEC about the filing. In such an instance and for the purposes of the Travel rule, the bank may list as the transmittor for the transmittors' money transmitter, and the recipient as the recipients' money transmitter. To guard against engaging in OFAC prohibited transactions, it is advisable that funds or their service providers screen against the OFAC list. U.S. investment companies and their investment managers also should conduct the necessary due diligence to ensure that their investment decisions do not violate U.S. sanctions. OFAC has stated that it will take into account the adequacy of a firms OFAC compliance program when it evaluates whether to impose a penalty if an OFAC violation has occurred. This research guide, or source tool, is a compilation of key AML laws, rules, and guidance applicable to mutual funds (i.e., open end investment companies as defined in Section 5(a)(1) of the Investment Company Act of 1940). We have received a letter from the Home Loan Bank,which states "in order to comply with Travel Rule, as of May 31,2003, the required information regarding beneficiaries of funds transfers needs to include complete addresses. The Recordkeeping and Travel Rule and Related Recordkeeping Requirements: Mutual funds are subject to requirements relating to the creation and retention of records involving the transmittal of funds (Recordkeeping and Travel Rule). [1] Other provisions of AMLA and the Corporate Transparency Act require the Secretary to revise the AML program rules and beneficial ownership rule.[2]. The following are selected excerpts from the preamble to the Occupational Injury and Illness Recording and Reporting Requirements, the Recordkeeping rule (66 FR 5916, 29 CFR Parts 1904 and 1952). FinCEN: Federal E-rulemaking Portal: http://www.regulations.gov. For medically eligible but unvaccinated employees who may have to be quarantined in other countries, the additional days can be taken from existing leave entitlements. Create your own Singapore guide with up to 12 of your Favourites. OFAC has the authority to impose substantial civil penalties administratively. A5: All transmittor's financial institutions must include and send the following in the transmittal order: Financial institutions include banks; securities brokers or dealers; casinos subject to the BSA; money transmitters, check cashers, currency exchangers, and money order issuers and sellers subject to the BSA. Our infographic provides a quick overview of customs formalities and clearance procedures for travellers. If the bank sends or receives funds transfers to or from institutions in other countries, especially those with strict privacy and secrecy laws, assess whether the bank has policies, procedures, and processes to determine whether amounts, the frequency of the transfer, and countries of origin or destination are consistent with the nature of the business or occupation of the customer. It is not a rule, regulation, or statement of the Securities and Exchange Commission (Commission). [1] William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Pub. You should not rely on the summary information provided but should refer to the relevant statutes, rules, orders, and interpretations. The NPRM cites several TF and drug trafficking prosecutions and investigations involving transactions that fell below the current $3,000 threshold. In such a case, the check and its instructions are the transmittal order effecting a transmittal of funds. Bank Secrecy Act (BSA) rule [31 CFR 103.33(g)]often called the"Travel" rulerequires all financial institutions to pass on certain informationto the next financial institution, in certain funds transmittals involving morethan one financial institution. This section covers the regulatory requirements as set forth in the BSA. 1Depending on where you are travelling to and/or from, some flights may require you to wear masks onboard. An intermediary financial institution must pass on all of the information it receives from a transmittor's financial institution or the preceding intermediary financial institution, but has no general duty to retrieve information not provided by the transmittor's financial institution or the preceding intermediary financial institution. 3. Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra: [Ongoing] Read Latest COVID-19 Guidance, All Aspects, [Hot Topic] Environmental, Social & Governance.